Comité pour la République du Canada /  Committee for the Republic of Canada

 Where Did All the Bailout Money Go?

February 22, 2010 (LPAC)—Where did all the bailout money go? That is the question raised by the London Telegraph in a February 19 article, which claims that the Bank of England and the British government spent well over one trillion pounds (or $1.6 trillion) saving the British financial system. It asks, what did we get for our money? The economy remains at "dangerously low levels," and bank lending continues to contract—just as it does in the U.S. The Telegraph, being a proper British propaganda sheet, never really answers the question, so we will.

The first thing to understand is that the Bank of England does not make a habit of falling into the traps it sets for others, like the Federal Reserve and the European Central Bank. The British announced all sorts of grandiose bailout plans, mainly as a way of luring the Fed and the ECB into spending enormous sums to bail out the British-dominated global monetary system. The Fed and the U.S. Treasury did exactly as the British ordered, launching a nation-killing financial rip-off under the guise of bailing out the banks, while the ECB raped the governments and population of the financial dictatorship known as the European Union. The U.S. tossed in a staggering sum, estimated at $24 trillion by TARP Special Inspector General Neil Barofsky, while the ECB also kicked in trillions of euros of bailout funds. Meanwhile, the sharpies at the Bank of England laughed at the gullibility of their stooges, and did relatively little themselves.

However, the question of how much money and where it went is also something of a fraud, as the perfidious Brits know well. Much of the money never really existed, being just computer entries into the accounts of the banks at their respective central banks, as a way of allowing the banks to pretend solvency. Another huge chunk was not cash up front, but took the form of government guarantees of financial paper of various sorts, under the dubious rationale that the markets would recover and the guarantees would quietly expire, without cost. The complaints about bank loans are a scam, since the purpose of the bailout was to plug the prodigious holes in the balance sheets of the banks, without letting that money out into the general economy, in the foolish belief that in doing so, hyperinflation could be avoided. The banks were never supposed to make loans with that money—as a matter of policy.

However, the U.S. government has also become the lender of last resort in the real estate markets, either making or guaranteeing nearly every mortgage now issued. Fannie Mae and Freddie Mac face enormous losses down the road, and will pass those losses directly to the taxpayer, and the same holds true for Ginnie Mae and the FHA. Plans are also afoot to try to bail out the commercial real estate market. It's a bottomless pit.

The devastation these criminal policies will cause cannot be fully measured in terms of dollars. How do you put a dollar value on the destruction of a nation, the destruction of its population, and the destruction of its future potential? The monetary cost is the least of it.